The city of Boulder is considering what its energy future will look like. The goal it to acquire "clean, local and reliable" energy in the future, and one voter-approved option is to start a municipal utility. For more information on the history of this decision, click here.

Economic development groups and chambers of commerce in the Denver metro area and in Grand Junction are asking the Colorado Public Utilities Commission to support Xcel Energy's bid to restrict energy-efficiency programs and solar rebates in Boulder.

The concern, the groups say, is that Xcel customers living outside of Boulder could be left with the tab for such programs if Boulder leaves Xcel Energy and starts its own municipal utility.

"We are concerned that the city of Boulder will skate from its responsibility to pay back the non-Boulder ratepayers for these investments, and may financially burden our businesses with these lost investments, if they establish a municipal utility," wrote Deborah Obermeyer, president and CEO of the Metro North Chamber of Commerce, in a letter to the PUC. "We don't believe it is fair to allow the City of Boulder to waive themselves from their responsibility and require non-Boulder businesses to pay for the city's departure from a system it took from and benefited from."

Obermeyer's letter was one of six sent in recent weeks to the PUC, which will make the final decision on how Xcel can treat Boulder customers.

Last month, Xcel asked the PUC for permission to tweak its solar rebate program in Boulder, limit Boulder customers' ability to apply for energy-efficiency rebates, and block Boulder residents from participating in future solar gardens and long-term wind-power purchasing programs.

"We have always been proud to offer energy-efficiency programs ... as well as other renewable-energy programs such as Solar Rewards and Windsource," said Jerome Davis, Xcel's regional vice president, at the time. "But the systemwide benefits of these programs require a long-term commitment for any customer who takes part, and Boulder city leaders have made it clear they may not be long-term customers."

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The filing at the PUC came after Boulder voters in November gave the city permission to break from Xcel Energy and start its own municipal utility.

City leaders are adamant that they have not yet made a decision about whether to leave the Xcel system.

But business organizations in Xcel territory across the state are nervous, in part because Colorado customers have been asked to pick up the tab for investments made in Boulder before.

Last year, the PUC allowed Xcel to begin charging all its customers for the cost of installing a smart grid in Boulder after the cost of the project ballooned from an estimated $15 million to nearly $45 million.

"Now that they've taken their smart grid and gone home, so to speak, we're bearing the cost of the installation," said Kevin McCaskey, president and CEO of the Jefferson County Economic Development Corp.

The city of Boulder has argued that Xcel is bound by state law to treat Boulder customers the same as any other customer and that limiting discretionary programs in the city would amount to discrimination.

"From our perspective, we haven't decided to municipalize yet, and city of Boulder customers continue to be customers of the company," said David Gehr, Boulder's deputy city attorney.

Gehr also said that, if Boulder does choose to municipalize, there are state and federal processes designed to determine how much Boulder will owe Xcel for any investments for infrastructure and energy-efficiency upgrades.

"If we're going to municipalize, we're going to, as a community, carry the freight for that," he said.

But the fact that a price may be negotiated, or arbitrated, between Xcel and Boulder does not ease McCaskey's concerns because he says those settlements often do not reflect the true cost of the investments that were made. In particular, the depreciation of assets on paper might not reflect the current value of the infrastructure, he said.

The six letters from chambers and economic organizations generally made the same argument, though McCaskey said he wasn't aware of an organized effort to have such groups send comments to the PUC.

Kelly Flenniken, executive director of the Grand Junction Economic Partnership, agrees that the letters were not coordinated. Instead, she said they reflect the real concerns of businesses in her area and across Xcel's territory.

"It's a statewide concern that we might be shouldering some expenses for a very specific group of users that is not us," she said. "We wouldn't expect to pay part of your mortgage."

Ballot language:
In November, Boulder voters narrowly approved two ballot issues related to starting a municipal utility: 2B and 2C. You can read the full text of the ballot language on the city's website.

Issue 2B asked voters to increase the existing utility occupation tax by up to $1.9 million a year. The money from the tax, which will be collected from customers by Xcel Energy, will be used by the city to cover the costs of moving forward with forming a municipal utility, such as more studies and legal fees.

Issue 2C asked voters for permission to actually form a municipal utility. The language allows the city to sell the necessary bonds to take over the current system from Xcel, but it states that the city may only move forward with forming a municipal utility if it can start the utility with rates that are the same or cheaper than Xcel's.

Helpful Links:City of Boulder: This is where the city is aggregating all of its documents, meeting information and updates on Boulder s energy future: bouldercolorado.gov/energyfuture

RenewablesYes: This website is run by the group of volunteers that lobbied local voters to pass a utility occupation tax in November to replace the expiring franchise fee from Xcel Energy. Now, the group is advocating for the city to secure a cleaner, more local energy supply. renewablesyes.org

Xcel Energy: Xcel is the largest utility in Colorado, and it currently provides electricity to Boulder. The city s 20-year franchise agreement with Xcel expired at the end of 2010. xcelenergy.com

Boulder Smart Energy Coalition: A citizen group that supports the city's general energy goals but has concerns about the risks involved with starting a municipal utility. bouldersec.com

SmartGridCity: Xcel Energy has installed a smart grid in Boulder. This web site provides more information on that initiative. smartgridcity.xcelenergy.com

Colorado Association of Municipal Utilities: This Colorado Springs-based group represents the state s 29 municipal utilities, which include utilities based in Lyons and Longmont. coloradopublicpower.org